Excerpt: bombay money-lenders act (bom. xxxi of 1947), sections 5, 25, 34 - person doing money-lending business without license whether commits offence--applicability of section 34.; section 5 of the bombay money-lenders act, 1946, is a bar against doing any money-lending business at all without a license, and if that provision is contravened, section 34 of the act becomes applicable, and the person doing money-lending business without a license commits an offence punishable under that section.;before sub-section (3) of section 25 of the bombay money-lenders act, 1946, was added to section 25 of the act by the bombay money-lenders (amendment) act, 1949, it was open to a money-lender to charge a rate of interest exceeding the maximum rate of interest fixed by the provincial government, and in..........therefore, mr. chitre says that if the legislature contemplated the issuing of a license to moneylenders who did money-lending business without a license, surely it would not be that his doing money-lending business without a license would constitute an offence, within the meaning of section 34.if this argument were to be accepted, it would lead to the startling result that a money-lender may do money-lending business without a license and he would come to no grief at all unless he files a suit for recovery of his loan under section 10. so long as he finds obliging customers who will return the loans to him, he could flagrantly defy the provisions of the bombay money-lenders act and carry on his business and no ill can happen to him. it is obvious that the bombay moneylenders act.....

Judgment:ORDER

[1] By this revision application the accused challenges his conviction under Sections 5 and 25(3), Bombay Money-lenders Act, 1946. The facts are not in dispute. Between 6-1-1948, and 24-10-1948, the accused had several money-lending transactions in respect of which he charged interest at a rate exceeding the maximum prescribed by the Provincial Government under the Act. This Act came into force in the Mahad taluka on 17-11-1947, and the accused carried on his business in that taluka. The penal section under which the accused has been convicted is Section 34 which provides that whoever fails to comply with or acts in contravention of any provision of this Act, shall, if no specifics penalty has been provided for in this Act, is punishable in the manner laid down in that section.

Turning to Section 5 it provides that no money-lender shall carry on the business of money-lending except in the area for which he has been granted a license and according to the terms and conditions of such license. It is not disputed that the accused has contravened he provisions of Section 5 because he has carried on business of money-lending without a license. Therefore reading Sections 5 and 34, it seems to me clear that he having failed to comply with and having acted in contravention of the provisions of Section 5, the penal provisions of Section 34 would apply, as no specific penalty is provided in Section 5 itself.

[2] Now, what has been very ingeniously argued by Mr. Chitre before me is that Section 10 of the Act makes it clear that no penalty was to be imposed upon a person carrying on money-lending business without a license. Section 10 deals with suits filed by money-lenders and it lays down that no civil Court shall pass a decree in favour of a money-lender who does not possess a valid license in respect of the loan on which the suit is based, and the section provides for suits being adjourned in order to enable the money lender to obtain the necessary license, and the section finally provides that if the money-lender fails to produce the license, then the Court shall dismiss the suit.

According to Mr. Chitre the only effect of not obtaining a license is that no decree can be passed in favour of such a person under Section 10. Mr. Chitre further points out that Section 10 itself contemplates that a license may be obtained after a money-lender has done money-lending business, and Mr. Chitre says that in fact in this case the accused has applied for a license on 5-5-1948. Therefore, Mr. Chitre says that if the Legislature contemplated the issuing of a license to moneylenders who did money-lending business without a license, surely it would not be that his doing money-lending business without a license would constitute an offence, within the meaning of Section 34.

If this argument were to be accepted, it would lead to the startling result that a money-lender may do money-lending business without a license and he would come to no grief at all unless he files a suit for recovery of his loan under Section 10. So long as he finds obliging customers who will return the loans to him, he could flagrantly defy the provisions of the Bombay Money-lenders Act and carry on his business and no ill can happen to him. It is obvious that the Bombay Moneylenders Act is an Act which was intended to put down a very serious evil in our society. It was intended to keep control over money-lending transactions and to see that excessive rate of interest was not charged by money-lenders, and the only way that such control can be maintained is by providing penalties for doing money-lending business without a proper license from the State.

Therefore, in my opinion, Section 10 has nothing whatever to do with Section 6. Section 10 refers only to those cases where the money-lender comes to Court for obtaining a decree, and the Court, instead of summarily dismissing his suit if he has no license, gives him an opportunity to obtain a license. Section 5 is a bar against doing any money-lending business at all without a license and if that provision is contravened, Section 34 be-comes applicable, and the person doing money-lending business without a license commits an offence for which he can be punished.

[3] Turning to Section 25, that section deals with fixing of the maximum rates of interest by the Provincial Government and Sub-section (2) of Section 25 provides that any agreement for payment of interest at a rate exceeding the maximum fixed by the Provincial Government shall be void and no Court shall in any suit to which the Act applies award interest exceeding the rate fixed by Government. Sub-section. (3) was added to this section by Act LVII [57] of 1919 and that subsection is that if any money-lender charges or receives from a debtor interest at a rate exceeding the maximum rate fixed by the Provincial Government under Sub-section (1), he shall, for the purpose of Section 34, be deemed to have contravened the provisions of the Money-lenders Act.

Mr. Chitre argues that in Section 25 the Legislature specifically refers to Section 34 when it intended that a contravention of the provisions of Section 25 should be made penal and to which Section 34 should apply, and inasmuch as there is no similar provision in Section 5, Section 34 is not applicable. Now, the difference in the Language between Section 5 and Section 25 is obvious. Section 5 contains a mandatory provision prohibiting any money-lender from carrying on business without a license. Section 25 does not contain any such provision. It merely provides for fixing the maximum rate of interest by the Provincial Government and also for the Court declaring any agreement to charge higher rate of interest void.

But there is nothing in Section 25 to impose an obligation upon the money lender not to charge a rate of interest exceeding the maximum rate. Therefore, before Sub-section (3) of Section 25 was enacted it would have been open to a money-lender to charge a rate of interest exceeding the maximum rate of interest fixed by the Provincial Government, and in doing so he would not be committing any offence. He would only have run the risk of his not being able to recover such interest because no Court could have given him relief on the basis of an agreement which provided for a rate of interest exceeding the maximum rate. Therefore, in order to make Section 34 applicable to Section 25 the Legislature had expressly to provide by sub Section (3) that when a money-lender charges or receives from a debtor interest at a rate exceeding the maximum rate, he commits an offence and contravenes the provisions of the Act for the purposes of Section 34.

[4] In my opinion, therefore, the conviction of the accused under Section 5 is proper. With regard to his conviction under Section 25(3), on the same parityof reason his conviction cannot be justified because Section 25(3) was enacted in 1949 and the offence committed was during the period 6-1-1948, to 24-10-1948. Therefore, while upholding the conviction of the accused under Section 5, Bombay Moneylenders Act, I must set aside his conviction under Section 25(3). The sentence under Section 25(3) will also be set aside and the fine paid in respect of the offence under Section 25(a) will be refunded to the accused. The accused is acquitted of the offence under Section 25(3) and his conviction under Section 5 is confirmed.